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decided: July 22, 1986.


Appeal from the Orders of Commonwealth Court dated December 5, 1984, and February 8, 1985, at No. 3107 C.D. 1983, AFfirming the Decision of the Unemployment Compensation Board of Review, Decision No. B-222884, dated October 4, 1983. Pa. Commonwealth Ct. , A.2d (1985) (Unreported Opinion)


John Stember, Pittsburgh, Frank J. Piatek, Neighborhood Legal Services, New Castle, for appellant.

Jerome H. Gerber, Elliot A. Strokoff, Handler, Gerber, Johnston, Strokoff & Cowden, Harrisburg, for Pa. AFL-CIO.

James K. Bradley, Unemployment Compensation Board, Harrisburg, for appellee.

Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ. Nix, C.j., files a concurring opinion. Hutchinson, J., files a concurring opinion in which Flaherty and Zappala, JJ., join.

Author: Papadakos

[ 511 Pa. Page 266]


The facts of this case are as follows: Appellant, Joseph Cugini, was laid off from his position at Mesta Machine Company (Mesta) on July 2, 1982. Shortly thereafter, he filed an application for unemployment compensation benefits, which was granted. In July, 1983, he attempted to open a claim for a second year of benefits. At that time, the local unemployment compensation office ruled that Appellant did not satisfy the financial eligibility criteria. Appellant appealed and a hearing was held before a Referee. The Referee determined that Appellant did not have sufficient wages in his base year*fn1 and ruled, therefore, that he was ineligible. Appellant then appealed to the Unemployment Compensation Board of Review (Board).

The Board found that Appellant received the following quarterly wages in his base year: second quarter, 1982 -- $5,072.00; third quarter, 1982 -- $2,612.00; fourth quarter, 1982 -- $0; and first quarter, 1983 -- $0. Total base year wages were $7,684.00. (Board Decision, Finding of Fact 2).

Section 404(e) of the Unemployment Compensation Law (Law), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. § 804(e), provides that a

[ 511 Pa. Page 267]

    claimant whose highest quarterly base year wages amount to $5,063.00 or more can qualify for a weekly benefit rate of $205.00, if his total base year wages amount to at least $8,120.00. Thus, Appellant here fell short of the total base year requirement under Section 404(e).

Section 404(a)(3) of the Law provides that a claimant who has insufficient wages to qualify under Section 404(e) may still qualify for benefits if his base year wages qualify him for any one of the next three benefit rates. Of the next three benefit rates, $202.00 is the lowest, but requires total base year wages of at least $8,000.00. Consequently, Appellant also failed to qualify under Section 404(a)(3).

While Appellant does not dispute the Board finding as to his earnings in the second and third quarters of 1982, he contends that the Board should have credited him with additional wages for the first quarter of 1983. At the Board hearing, Appellant presented uncontroverted testimony that on December 26, 1982, he applied for eight weeks of severance pay, amounting to $3,652.40 (N.T., p. 3). Under normal employer practice, this amount would have been given to him on January 10, 1983 (N.T., p. 3). Because of a work overload in its accounting department, the employer (Mesta) advised Appellant's union that actual payment would be delayed until February 13, 1983 (N.T., pp. 3-4). However, on February 9, 1983, Mesta filed for bankruptcy (N.T., pp. 3-4). The bankruptcy proceeding further delayed payment, although Appellant eventually received the full amount of the severance pay in August, 1984. (See Stipulation of Counsel and Order of Commonwealth Court dated October 9, 1984).

At the Board hearing, therefore, there was only one controverted issue, that being whether Appellant's severance pay should be treated as wages paid on January 10, 1983, the date the employer was supposed to pay it, or on the date it was actually transferred to Appellant's possession. If the Board had credited this amount to the first quarter of 1983, Appellant's base year earnings would have

[ 511 Pa. Page 268]

    exceeded $8,000.00, and he would have been eligible for the unemployment compensation benefits at issue.

The Board concluded that wages must be credited to the quarter in which the date occurs on which such wages are actually paid. Since Section 4(x) of the Act defines "wages" as "remuneration paid," 43 P.S. § 753(x), the Board's decision construes the Act literally, such that a claimant must actually receive possession of the money or payment due before it can be counted in his base year.

Here, the employer acknowledged that the severance pay was due on January 10, 1983. Under these circumstances, Appellant argues that the Board's own regulations require that it be counted in the ...

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